How Do Real Estate Investors Raise Capital from Family Offices and High Net Worth Individuals?

Raising capital from family offices and ultra-high net worth individuals requires a strategic approach that differs significantly from traditional fundraising methods. On this episode of The Real Estate Investing Club, host Gabe Petersen sits down with Kholt Mulderrig from DCA Family Offices to uncover exactly what family offices look for when evaluating real estate investments and how operators can position themselves to secure this institutional capital.

Quick Answer: To successfully raise capital from family offices, real estate investors must have a clearly defined investment strategy that differentiates them from competitors, a documented track record with transparent performance data on all deals (including losses), and professionally prepared materials ready to share immediately. Family offices prioritize after-tax returns and favor recession-resilient asset classes like manufactured housing that offer strong depreciation benefits and stable cash flow with minimal operational intensity.

What Is a Family Office and Who Qualifies as Ultra-High Net Worth?

Quick Answer: A family office is a wealth management structure for ultra-high net worth individuals and their families, typically defined as qualified purchasers with $20+ million in investable capital who can write multi-million dollar equity checks for individual deals.

Family offices represent some of the most sophisticated capital sources in real estate investing. According to Mulderrig, who leads all real asset strategies at DCA Family Offices managing approximately $600 million in equity, these structures serve families who have achieved significant wealth through business sales, ongoing successful enterprises, or generational accumulation.

The threshold for family office-level wealth begins at the qualified purchaser designation. These investors can commit $2-5 million in equity to a single real estate deal and maintain diversified portfolios across multiple asset classes. As Mulderrig explains, “This is really about stewardship for the next generation. This wealth that I’ve accumulated can continue in perpetuity.”

Family offices differ from traditional institutional investors in several key ways. They’re typically taxable investors based in the United States, which makes tax efficiency paramount. They also take a longer-term view focused on wealth preservation and growth across generations rather than quarterly returns. Understanding these fundamental differences is crucial for real estate syndication success.

How Should Real Estate Operators Position Themselves to Attract Family Office Capital?

Quick Answer: Operators must differentiate their strategy from competitors, maintain a comprehensive documented track record, and have professional marketing materials immediately available when opportunities arise, as family offices receive overwhelming deal flow daily.

The competition for family office attention is intense. Mulderrig reveals that his team sees ten multifamily deals every single day. To stand out in this crowded landscape, real estate operators need a multi-stage approach to positioning.

Define Your Unique Strategy: Family offices don’t want generalists who dabble across multiple asset classes. They want subject matter experts with a clearly articulated investment thesis. As Mulderrig emphasizes, “What is the strategy and how is it different than what everybody else is doing? Or how are you approaching it in a different way so that you can really stand out?”

Your differentiation might come from geographic specialization, a unique value-add approach, or focusing on an underserved niche within an asset class. The key is articulating why your approach generates superior risk-adjusted returns compared to the hundreds of other operators competing for the same capital.

Document Your Complete Track Record: In today’s data-driven investment environment, transparency is non-negotiable. Family offices conduct thorough GP (general partner) underwriting before even looking at specific deals. This means having every single deal you’ve completed documented with actual performance metrics—not just your winners.

“You should be prepared to have your track record available to potential investors to say, hey, this is every single deal I’ve done. This is how they’ve performed,” Mulderrig notes. Interestingly, having some underperforming deals in your track record isn’t necessarily disqualifying. “You might have some losers, that may still be okay. Like you shouldn’t be scared of the fact that you have a loser as long as you’re able to convey what happened.”

This aligns with research from Preqin showing that institutional investors value transparency and the ability to learn from setbacks over a perfect but potentially manipulated track record.

Why Do Family Offices Favor Mobile Home Parks and Manufactured Housing?

Quick Answer: Family offices prefer manufactured housing because it delivers comparable returns to traditional multifamily with significantly lower operational intensity, longer tenant tenure (7+ years average), superior tax benefits through accelerated depreciation, and proven recession resilience with minimal new supply competition.

During the conversation, Mulderrig revealed that manufactured housing represents a significant allocation within DCA’s portfolio, and for compelling reasons that every real estate investor should understand.

Operational Efficiency: Unlike traditional multifamily properties where landlords bear responsibility for interior repairs and regular capital expenditures, manufactured housing operates on a ground lease model. Residents own their homes, making them responsible for interior maintenance and repairs. Park owners focus solely on infrastructure—utilities, roads, landscaping, and common areas.

“Your average resident is living there for seven years. If something breaks in it, it’s their house. So it’s their responsibility,” Mulderrig explains. This stands in stark contrast to traditional multifamily investing where annual tenant turnover requires constant unit refreshes and repair management.

Supply Constraints: Perhaps the most compelling aspect of manufactured housing is the virtual impossibility of new competition. Municipalities across the United States actively resist new mobile home park development, viewing the land as better suited for vertical multifamily or commercial development.

As Peterson shares from personal experience, “We have one out here in Eastern Washington with 30 something sites and tons of land we could expand into. The city just won’t let us expand.” This regulatory environment creates a moat around existing properties that’s nearly impossible to replicate in other real estate sectors.

According to the Manufactured Housing Institute, no new mobile home parks have been built in many major metropolitan areas in decades, while demand continues growing as housing affordability challenges intensify nationwide.

Tax Efficiency: For taxable investors like family offices, the depreciation benefits of manufactured housing are exceptional. The asset composition—primarily land improvements like septic systems, gas lines, electrical infrastructure, and roads—qualifies for accelerated depreciation treatment.

“If I can take 100 percent bonus depreciation on a portion of that property and I can use those losses to offset or delay the tax liability from elsewhere in the portfolio, it just makes that compounding effect more powerful,” Mulderrig notes. This tax efficiency can dramatically improve after-tax returns compared to traditional commercial real estate assets.

What Materials Must You Have Ready Before Approaching Family Offices?

Quick Answer: Professional investment decks, complete track record documentation with performance metrics for all deals, detailed market analysis, and clear investment thesis materials must be immediately available, as family offices have limited time and won’t follow up for missing information.

Timing and preparedness are everything when connecting with family offices. Mulderrig’s advice is unequivocal: “Have your story down and have your materials ready. In the family office space in particular, we see so much that we don’t have time to reply to emails all the time.”

When you finally get face time with a family office decision-maker, you have one shot to make an impression. Missing materials or delays in providing requested information will result in your opportunity being lost to the next operator in their pipeline.

Essential Materials Include:

• Professional investment deck clearly articulating your thesis, market opportunity, and competitive advantage
• Comprehensive track record document showing all deals with dates, investment amounts, returns (IRR and equity multiple), and current status
• Market research and data supporting your investment thesis from sources like CoStar or Green Street
• References from previous investors, preferably other institutional or high net worth individuals
• Clear documentation of your team’s experience and organizational structure
• Sample deal underwriting showing your analytical approach and assumptions

Peterson underscores this from his own experience: “I think it’s important. Everybody gets hit in the face at one point, just because life happens. You just need to kind of own whatever it is that happened, own it, and explain it.”

How Do Family Offices Evaluate Geographic Markets for Real Estate Investment?

Quick Answer: Family offices analyze supply-demand dynamics, long-term economic fundamentals, and seek contrarian value opportunities in beaten-down markets with strong underlying drivers, rather than following capital flows into oversupplied trendy markets.

Market selection represents a critical component of investment strategy that family offices scrutinize carefully. Mulderrig’s perspective offers a contrarian view that challenges conventional wisdom in today’s real estate environment.

When asked about his most exciting metro, Mulderrig surprises with an unexpected answer: “We actually like probably the greater Bay Area. That’s probably a contrarian view, but the Bay Area is not going away. It’s still the epicenter of tech and innovation, especially when we start thinking about the long-term AI boom. And it’s been beat up.”

This contrarian stance reflects sophisticated institutional thinking about market cycles. While most capital flows into Sunbelt markets like Texas, Florida, and the Carolinas, these markets now face oversupply challenges with flat rent growth. According to CBRE research, many Southeast markets have seen record multifamily deliveries creating significant near-term headwinds.

Conversely, expensive coastal markets that have experienced negative sentiment often present value opportunities for patient capital. “You see a lot of capital going into the Southeast. You see a lot of new supply. You also see flat rents,” Mulderrig observes. “There’s no news like bad news. I think some of that gets overhyped.”

The Pacific Northwest also garners positive attention: “Vancouver, Washington and the greater Seattle suburbs are also good markets. It’s a stable business environment. Generally good tax area. You got Amazon.”

This geographic analysis emphasizes fundamental principles that apply across all real estate market analysis: evaluate supply-demand balance, assess economic drivers, and consider where the crowd isn’t looking.

What Role Does Tax Efficiency Play in Family Office Real Estate Strategy?

Quick Answer: Tax efficiency is paramount for family offices as taxable US-based investors, making depreciation strategies through cost segregation and bonus depreciation critical factors that can dramatically improve after-tax returns and compound wealth faster than gross returns alone.

One of the most important distinctions between family offices and institutional investors like pension funds or endowments is tax treatment. Family offices represent taxable capital, making after-tax returns the only metric that truly matters.

“As a family office, these are US-based investors, taxable investors. Being efficient with capital is of paramount importance,” Mulderrig emphasizes. This tax sensitivity influences every aspect of investment decision-making from asset class selection to hold period strategy.

Cost Segregation and Accelerated Depreciation: The ability to accelerate depreciation through cost segregation studies significantly impacts investment attractiveness. Manufactured housing excels in this area because the majority of the property value consists of short-lived assets like infrastructure, utilities, and land improvements.

“The ability to do a cost segregation on a manufactured housing project and the amount of depreciation that you can actually take as bonus is significant in comparison to traditional multifamily,” Mulderrig notes. Traditional office buildings, primarily concrete shells with 39-year depreciation schedules, offer minimal tax benefits by comparison.

The tax code classifies septic systems, gas lines, electrical infrastructure, and other mobile home park improvements as property with less than 20-year useful lives, qualifying them for 100% bonus depreciation. This allows investors to offset income from other sources and defer significant tax liability.

Compounding Effect: The power of tax deferral compounds over time. By reducing current tax liability and reinvesting those savings, family offices can deploy more capital into subsequent investments. “If I can use those losses to offset or delay the tax liability from elsewhere in the portfolio, it just makes that compounding effect more powerful,” Mulderrig explains.

For operators seeking family office capital, understanding and clearly articulating the tax benefits of your investment strategy can provide significant competitive advantage. This means working with qualified tax professionals to conduct cost segregation studies and quantifying the after-tax returns in your investment presentations.

How Should Operators Network and Generate Deal Flow with Family Offices?

Quick Answer: Define your investment thesis first, use data to validate it in specific markets, then systematically connect with all relevant operators and brokers in those markets to establish relationships before deals arise, as family offices co-invest through established networks.

Deal sourcing for family office-backed investments follows a different path than traditional real estate acquisition. Mulderrig reveals DCA’s systematic approach that operators can learn from and adapt to their own fundraising efforts.

“We define what the thesis is, and then go try to find data to support the thesis in that market. Then we go try to find who are the best people doing that in that particular market. And then we talk to everybody,” Mulderrig explains.

This approach inverts the typical process where operators find deals then seek capital. Instead, family offices identify attractive strategies and markets, then seek the best operators already active in those spaces to co-invest alongside.

Broker Relationships: Peterson highlights the often-underestimated value of commercial real estate brokers for deal sourcing. “I have been leaning heavily on brokers because I just didn’t realize how good of deals are out there through brokers.”

Mulderrig expands on this strategic advantage: “If they can go to an owner or seller knowing that you’re in the background wanting to buy that property, it makes them more competitive if it’s JLL versus CBRE and they’re both trying to get the listing. The broker can say ‘I have a guy that will buy this tomorrow and we don’t have to go through a three to six month process.'”

This relationship dynamic works in multiple directions. Operators with access to family office capital become valuable allies for brokers seeking listings. Family offices gain off-market or pre-market deal flow through these established operator relationships.

For operators, this means investing time in relationship building before you need capital. Attend industry conferences, join real estate investing associations, and systematically connect with family office professionals on LinkedIn and through introductions. The goal is establishing credibility and staying top-of-mind so when the family office identifies your market or strategy as attractive, you’re already a known quantity.

What Mistakes Should Operators Avoid When Pitching to Family Offices?

Quick Answer: Avoid being unprepared with materials, lacking a differentiated strategy, hiding underperforming deals from your track record, pitching outside your area of expertise, and failing to articulate tax-efficiency benefits that matter to taxable investors.

Learning from common mistakes can save months of wasted effort and help operators present themselves professionally from the first interaction.

Dabbling Across Asset Classes: One of the fastest ways to lose credibility with sophisticated investors is presenting yourself as an expert in multiple unrelated real estate sectors. “You want to make sure that you’re not dabbling in a lot of different asset classes, a lot of different strategies,” Mulderrig warns. “People like to bet on subject matter experts. They don’t want to bet on someone who’s never done it before.”

This doesn’t mean you can never expand into new asset classes, but that expansion should be logical and build on existing expertise. A multifamily operator moving into manufactured housing makes strategic sense. That same operator simultaneously pursuing office, retail, and industrial would raise red flags.

Hiding Track Record Blemishes: The temptation to present only successful deals is understandable but ultimately counterproductive. Sophisticated investors will discover the full picture through their due diligence process, and withholding information destroys trust.

“You shouldn’t be scared of the fact that you have a loser as long as you’re able to convey what happened. Everyone is forgiving and they can look and say, yeah, there were things outside your control,” Mulderrig notes.

Peterson’s experience validates this approach. After a storage facility fire the weekend before a planned sale, he initially felt the incident would permanently damage his credibility. Instead, owning the situation and clearly explaining what happened (and what was outside his control) demonstrated the integrity that investors value.

Ignoring Tax Considerations: Perhaps the most common oversight is presenting returns on a pre-tax basis without addressing the after-tax reality that drives family office decision-making. Every investment presentation to taxable investors should clearly show after-tax returns, ideally with sensitivity analysis showing impact across different tax scenarios.

Being Slow to Respond: In the fast-paced world of real estate transactions, delays kill deals. When a family office requests information, responding within hours rather than days can mean the difference between securing capital and being forgotten. “Be ready, because when you get the opportunity, you’ve got to be prepared to pounce on the opportunity when you actually get face time with folks,” Mulderrig advises.

How Are Market Conditions and AI Impacting Family Office Real Estate Strategy?

Quick Answer: Family offices use AI for market research and data aggregation to accelerate due diligence, while focusing on recession-resilient asset classes and contrarian geographic plays as interest rate environments and supply-demand imbalances reshape opportunity sets.

The real estate investment landscape continues evolving rapidly, with technology and economic factors creating both challenges and opportunities for family offices and the operators they partner with.

AI Integration: When asked about AI implementation, Mulderrig highlights market research as the primary application: “The biggest one is market research. It’s been a great tool for us to augment the market research. Something that would take you a really long time to do, it can synthesize that down.”

Peterson enthusiastically agrees, noting that tools like Perplexity AI can compress a full day of market research into 30 minutes. “It’s just amazing how it works that way.” This efficiency allows family offices to evaluate more opportunities and conduct deeper due diligence on markets they’re less familiar with.

However, Mulderrig cautions that while AI excels at data aggregation, human judgment remains essential: “Obviously you’ve got to read it and you’ve got to test it and make sure that it is truly accurate.” The technology augments rather than replaces experienced investment professionals.

Market Environment Considerations: Current market conditions create unique dynamics that family offices are navigating carefully. Mulderrig emphasizes the importance of macro-economic awareness: “We look at what is the Fed doing? What are interest rates doing? Because that’s what’s really going to shift the trajectory of your investment.”

The sustained higher interest rate environment has fundamentally changed real estate valuations and deal structures compared to the 2010-2021 period of ultra-low rates. Properties purchased with cheap debt now face refinancing challenges, creating potential distress opportunities for well-capitalized family offices.

Simultaneously, the supply glut in many Sunbelt markets means family offices are looking beyond the obvious destinations. “You see a lot of capital going into the Southeast. You see a lot of new supply. You also see flat rents,” Mulderrig observes, explaining the contrarian interest in beaten-down coastal markets.

For operators, staying informed about these macro trends through resources like The Economist (Mulderrig’s recommendation for general market awareness) helps align your strategy with where sophisticated capital is flowing.

What Due Diligence Should Operators Expect from Family Office Investors?

Quick Answer: Family offices conduct extensive multi-stage due diligence starting with GP/operator evaluation before examining specific deals, including background checks, reference calls, track record verification, site visits, and third-party validation of all claims over weeks or months.

Understanding the rigorous due diligence process family offices employ helps operators prepare appropriately and set realistic expectations for fundraising timelines.

“We go through a multi-stage underwriting process. Number one is underwriting the GP or general partner and really looking at them on a personal level and their strategy and their track record before we even start looking at deals with them,” Mulderrig explains.

This GP-first approach means that family offices invest in operators as much as they invest in specific properties. They want to establish relationships with proven operators who can source and execute on multiple deals over time, not just evaluate one-off opportunities.

The Due Diligence Process Typically Includes:

• Background verification of key team members and principals
• Reference calls with past investors, lenders, and business partners
• Verification of track record data against actual property records and tax returns
• Analysis of previous deal performance across market cycles
• Assessment of operational capabilities and systems
• Review of legal structure and documentation standards
• Property-level due diligence including third-party reports, site visits, and market analysis
• Financial modeling verification and stress testing of assumptions

This thorough process protects family office capital but also benefits operators. Once you’ve successfully completed due diligence with a family office, subsequent deals move much faster as the GP evaluation is complete.

Building Long-Term Relationships: The goal should be establishing yourself as a trusted operator who receives capital across multiple deals rather than one-time transaction. “It comes back down to supply and demand,” Mulderrig notes when discussing how they evaluate opportunities. Family offices want operators who can consistently source deals in attractive strategies.

Operators should approach family office relationships with a long-term mindset, delivering on promises, communicating proactively about challenges, and building a reputation for professionalism and results. These relationships, once established, can provide reliable capital for years or decades.

Key Takeaways for Raising Family Office Capital in Real Estate

Successfully raising capital from family offices and ultra-high net worth individuals requires a fundamentally different approach than traditional fundraising. The insights shared by Kholt Mulderrig from DCA Family Offices provide a roadmap for operators ready to access this sophisticated capital source.

Strategy Comes First: Before approaching family offices, clearly define your investment thesis and what makes it differentiated. Subject matter expertise in a specific asset class and market beats generalist approaches every time. Whether it’s mobile home parks, value-add multifamily in secondary markets, or another niche, own your strategy completely.

Transparency Builds Trust: Document your complete track record including underperforming deals. Own your mistakes, explain what happened, and demonstrate what you learned. This integrity matters more than a perfect record that sophisticated investors won’t believe anyway.

Tax Efficiency Matters: For taxable investors like family offices, after-tax returns drive decisions. Understand the depreciation benefits of your asset class, conduct cost segregation studies, and clearly present after-tax return projections in all marketing materials.

Be Prepared: When opportunity knocks, you have one shot. Professional materials, comprehensive data, and immediate responsiveness separate successful fundraisers from those who miss their chance.

Play the Long Game: Family office relationships develop over months or years, not days. Invest in networking, deliver exceptional results on initial investments, communicate proactively, and build a reputation that generates referrals to other family offices.

As Peterson reminds listeners at the end of every episode, there’s an old saying: “The best time to plant a tree was 20 years ago. The next best time is today.” If you haven’t started building relationships with family offices and high net worth investors, today is the day to begin.

The real estate investing landscape continues evolving, but the fundamental principles of demonstrated expertise, transparent communication, and delivering strong risk-adjusted returns remain constant. By following the framework outlined in this conversation, operators can position themselves to access the significant capital pools that family offices represent.

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